IFRS S1 requires an entity to disclose information about sustainability-related risks and opportunities. Which are those that must be disclosed?
Answer and explanation
Correct answer: D. Those that could reasonably affect its cash flows, access to finance or cost of capital
- Step 1: IFRS S1 is aimed at investors' decision needs.
- Step 2: It asks for risks and opportunities that could reasonably affect prospects: cash flows, access to finance or cost of capital.
Answer
Those that could reasonably affect its cash flows, access to finance or cost of capital.
Why not the others: Past fines alone are too narrow, since future risks must be considered. Emissions are one subject covered by IFRS S2; S1 is wider. Competitor disclosure is irrelevant to what the entity must report.
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